Ohio miners forced to attend Romney rally without pay...

[kandrathe]

What do you think the Fed should be doing instead, and what do you think the consequences would be?

1) I think they should keep the value of assets stable and inject liquidity if needed (and take it away as is feasible) only to avoid a market stall (money supply dries up). 2) they should probably raise interest rates to a nominal (1/2% at least) -- it should never be at zero(for long anyway) 3) they should stop pretending that their silver bullets can solve this, since our issue is that we need a political change (in Congress).

In the US, the problem with our economy is that we've gone from hyper-activity to lethargic due to bad policy and a lack of certain oversight (regulations) over Credit Default Swaps. In the face of the recession, the Democrats crammed through a bunch of social change rather than enact the kinds of legislation that would inspire a recovery. They passed a slew of new regulations, none of which alter the unregulated nature of Credit Default Swaps. The Republicans have no good plans, and so their only approach is to obstruct the Democrats. We need Congress to change the status quo such that investors, and consumers have confidence that their spending is safe. I think there was also an error in assumption that "War(s)" are good or neutral to the economy. In this case, Iraq, Afghanistan, and the plethora of brush fires over the past decade have diverted useful productivity into destruction with little reward (some amount of stability and peace -- at a high cost). I think Vietnam and Korea were small enough that they barely impacted the economy. WWII was 100% mobilization -- our issues with WWII came after the war when we demobilized (however, we had a whole world to rebuild). Maybe this time we can find a way to keep everyone busy without a need for destroying the world.

As it is, consumers, and business aren't certain that their spending will be worthwhile, compared to paying down debts (hunkering down through the recession). It is the lack of confidence and retrenchment mentality that leads to more lay offs, and a spiral of bankruptcies and unemployment. The deficit is a problem because we've spent heedlessly in good times and bad, to the point where now our debt maintenance seriously impacts a larger and larger portion of revenue collected. The poverty rate, foreclosure rate, and unemployment rate are all heading in the wrong direction. The Fed cannot save us. Only "We" as expressed in our political leadership can lift us out of this "depression" or "really bad recession" depending on who you speak with.

The current problems that the middle class has isn't really about consumer goods - well, except when people buy too much stuff that they don't need and rack up credit card debt.

You don't have an issue with imported goods, because they've leveraged a global economy where wages, and protections(labor, economy, etc.) are less. For example, I've often found PC printers are so ridiculously cheap that the replacement ink cartridges exceed the cost of the original product. Or, the cost to replace the fuse on my 18 year old microwave was more than a new microwave.

When we buy things that cannot be imported (like College), we are paying for all the things we enjoy here (fair labor, ecology) and all the taxes, state, local, and federal to pay for all the things that we do at the those levels. Granted, there is much inefficiency in most education operations (waste, redundancy, etc.), but it doesn't account for the 6-10% increases in costs (per year). Automation in making goods can increase productivity (manifold), whereas that expression in education would be 1 teacher for every 100 or 1000 students. You cannot cram the quality of a 30 minute doctor visit into 5 minutes, or 1 minute.

Part of why we are in this boat now, is that finally, the world has become whole again. After WWII, the US enjoyed 20-30 years of dominating the rubble that remained in Europe and Japan. In the 70's-80's, that started turning around where we had to actually compete. In the past 60 years we've become comfortable with paying for safety, fair labor, and ecology (and the rest of the world couldn't afford our goods). Coupled with the advent of Peak Oil -- unlimited growth requires unlimited cheap cheap energy -- something we are struggling to maintain (with oil its a losing battle).

One group (the one I'm in) believes safety, fair labor, and ecology are worth it, but we need to get the rest of the 3rd world up to speed. Another group wants to dismantle safety, fair labor, and ecology requirements in the 1st world in order to compete with the new 3rd world industrial economies (India, China, Africa, South America)-- which to me seems likes a huge step backwards for civilization.